A view of SAA airplanes at Cape Town International Airport on February 18, 2020.
Gallo Images/Jacques Stander
- The business rescue practitioners of the airline are effectively “mothballing” it as they wait for government to come up with funding.
- Finalising the business rescue process of SAA is being postponed by yet another week.
- This raises the question of what will happen if government can only come up with part of the R10.4 billion needed to implement the rescue plan.
All the airline operations of South African Airways have been suspended with immediate effect while a process is underway to “put the airline under care and maintenance” until funding discussions between the business rescue practitioners and government are complete.
This is according to an announcement by the flag carrier’s business rescue practitioners on Tuesday.
All existing cargo and repatriation flights will be undertaken, but no new ones will be accepted.
Already at a virtual meeting of creditors on September 18, the embattled airline’s rescue practitioners indicated that they were ready to either implement a structured winding down of the airline and sell its assets, or liquidate it due to no funding having been made available by government yet.
A last minute letter, signed by SAA’s shareholder, the Department of Public Enterprises, as well as National Treasury, indicating continued attempts to obtain funding or a strategic equity partner made the rescue practitioners give government another week to come up with the money at that time.
It has now been more than a week since then.
“There has been certain progress throughout the previous week in relation to the securing of funding for the implementation of the business rescue plan, subject to certain terms and conditions,” states the latest rescue practitioner letter to creditors.
The rescue practitioners say they have engaged with government and “certain funders” that have indicated a willingness to provide a portion of the R10.4 billion in funding required for the implementation of the business rescue plan.
The rescue practitioners are engaging with government to secure the remaining funding required to fully implement the business rescue plan. They are also in talks about what the implications would be for the company if it receives only a portion of the required funding.
The rescue practitioners said they hope to conclude these details next week.
While government is still searching for funds, Mashudu Raphetha, president of the National Transport Movement (NTM) urged the DPE to annouce a board of directors for the “new SAA” in order to restore public confidence in the airline.
“We have no doubt that with a competent board and executives, SAA will be a force to be reckoned with again. We appeal to taxpayers to give SAA a last chance to proudly fly the South African Flag and play a pivotal role in the development of the country,” he said.